Interest-Free Student Loans in Singapore

    Singapore is known to offer top-quality university education. However, pursuing degrees or courses may be difficult even at public universities and polytechnics that offer education at subsidised rates, without financial assistance.

    While most banks and private financial institutions in Singapore offer education loans with low rates of interest, there aren’t many that offer no-interest tuition loans.

    The government in its attempt to encourage people to go for higher education offers a range of benefits on these loans. These loans, administered by private banks like DBS and OCBC, tend to be effectively zero-interest loans if the dues are repaid before the completion of the degree. The issuers of these loans don’t charge penalty charges for early redemption or pre-closure.

    Best Interest-Free Education Loans

    If you’re, however, specifically looking for zero-interest loans for higher studies, you can check the following out:

    • NUS Study Loan: One of the few interest-free loans available for students in Singapore, this loan will cover your tuition fee, living cost or both throughout the entire duration of your undergraduate course, depending on your level of need. Singapore citizens or permanent residents (PRs) with an annual income below S$2,700 and international students with an annual income below S$1,200 can apply. A guarantor, aged between 21 and 60, and with sound financial standing is required. Full fee paying Singapore citizens and PRs and those receiving MOE tuition grants can apply, provided they satisfy all the conditions of assessment. International students who have used up their MOE tuition grant and have taken NUS Study Loan before full interest is charged, are also included in the scheme. Full interest-free loans are provided to only extremely needy Singapore students. Others have to start repaying the loan with interest six months after completion of graduation or after finding a job, whichever is earlier. NUS offers three types of interest:
      • Loan that covers 10% or 20% of the tuition fee payable by a student.
      • Loan that covers 10% or 20% of the tuition fee payable by a student in addition to an allowance of up to S$3,600 p.a. for covering the living costs.
      • Loan that provides living allowance of up to S$3,600 p.a. for students who have received an assistance equal to 100% of the tuition fee in scholarship or through some other loan.

      Please check the dedicated page on the website owned by NUS to learn more about the exclusions.

    • FRANK by OCBC: FRANK by OCBC is a tuition fee loan available to students studying at public universities like NTU, NIE and NUS. It is a 0% interest loan that allows you to start making repayments two years after you have graduated, at the latest. This loan will also cover up to 90% of the tuition fee payable by a Singaporean student in the public universities named above.
    • DBS Tuition Fee Loan: DBS offers tuition loans to eligible students studying in public universities and polytechnic institutions in Singapore. Local students, PRs and international students are free to apply as long as they meet the eligibility criteria set by the bank. No interest would apply on the loan during the course of study. Post completion, interest will be charged at the prevailing average prime rate of UOB, DBS and OCBC. You can get up to 90% of the tuition fee payable by a Singaporean student at public universities and NIEs and 75% of the tuition fee payable by a Singaporean student at polytechnics. Repayment can be made for up to 20 years for a university/NIE study loan and up to 10 years for a polytechnic study loan from the time of completion of your course. A financially stable guarantor, aged between 21 and 60, is needed. Check the bank website to find out the list of institutions covered under the scheme and to know more about the exclusions.
    • SIT Study Loan: Full-time students of Singapore Institute of Technology, who are either Singapore Citizens/PRs or who are international students who have won MOE grant are eligible for this loan. Singapore citizens and PRs who are holders of A-level certificates or non-accredited diplomas and are taking bridging modules to move into undergraduate courses can also apply. This loan offers up to 10%/20% of the total tuition fee payable by a Singapore citizen (depending on whether the total income of the student is above S$950 but below S$2,700, or below S$950). Alternatively, you can get a living allowance of up to S$950.
    • CPF Education Scheme: This is a highly subsidised loan available to students registered for full-time, government-subsidised courses. A CPF member can take out monies from his/her CPF Ordinary Account (OA) up to a certain limit and repayment isn’t mandatory until one year after the completion of the course. It has been designed ideally for young students fresh out of school or the national service who want to move into tertiary education. Rate of interest charged, starting one year after course completion, would be equal to the current OA rate. For the first quarter of 2018, it has been pegged at 3.5% at most. While the minimum monthly repayment amount is S$100, a higher monthly installment amount will be set so as to enable you to pay off the loan within six years. This would reduce the interest burden on you.

    While the CPF loan may not be interest-free strictly speaking, it is still one of the cheapest options available to you. The other loans too will attract interest after graduation/completion of the course. If you can start paying the dues for a loan soon after it’s issued to you, by the time you graduate, you may not be carrying a high balance.

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